Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 08/01/2009, Docket: RP09-723-000, Status: Effective

Second Revised Sheet No. 735 Second Revised Sheet No. 735

Superseding: First Revised Sheet No. 735

. RATE SCHEDULE MO-1 .

Kern River Firm Transportation Services

(Continued)

ARTICLE VIII - INVOICING AND PAYMENT

8.1 Invoicing. When information necessary for invoicing by Transporter is

in the control of Shipper, Shipper shall furnish such information to

Transporter on or before the fifth (5th) Business Day of the Month

following the Invoicing Month. NAESB WGQ 2.3.7: "The cutoff for closing

of measurement is 5 Business Days after business month." If information

necessary for invoicing is not available in time for Transporter to

render a timely statement, Transporter may use reasonable estimates and

subsequently reconcile such estimates with actual information. NAESB

WGQ 3.3.14: "The imbalance statement should be rendered prior to or with

the invoice, and the transportation invoice should be prepared on or

before the 9th business day after the end of the production month.

Rendered is defined as postmarked, time-stamped, and delivered to the

designated site." Shipper and Transporter shall have the right to

examine, at reasonable times, books, the records and charts of the other

to the extent necessary to verify the accuracy of any invoice, charge or

computation made under or pursuant to any of the provisions hereof.

8.2 Payment. On or before the twenty-fifth Day of each Month, or the

previous business Day in the event the twenty-fifth Day is a weekend or

holiday, Shipper shall pay Transporter by wire transfer of immediately

available funds to a depository designated by Transporter, the amount

due for the Billing Month.

8.3 Interest on Unpaid Amounts. Should Shipper fail to pay the amount of

any bill rendered by Transporter when such amount is due, unless such

failure to pay is the result of Transporter's error, interest shall

accrue on the amount not paid at a rate of interest equal to the then

effective rate computed in the manner set forth in Section 154.501(d)(1)

of the FERC's regulations under the Natural Gas Act. If such rate

becomes unavailable, the rate shall be computed on the basis of the

lesser of two percent (2%) above the prime rate from time to time

charged by Chase Manhattan N.A. (or the succeeding bank of Chase

Manhattan, N.A.), or the maximum applicable nonusurious rate of interest

in the State of Texas.